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Organisational Marketing Strategies and the Digital Age The Role of Marketing Strategy Development As marketing professionals, we have a clearly defined role within the organisation???to promote the organisation’s services and/or products to potential customers in order to increase market share and grow the business. Yet throughout the years, marketing and promotion is straightforward in a world where consumers are spoiled for choice with most any product or service. In addition, consumers cannot be considered a group as a whole. Customers are people, and vary considerably and have different needs so cannot all be satisfied in the same way. Kotler 31) These reasons mean that marketing must be strategic in order to have the biggest impact on obtaining customers, increasing market share, and growing the business. Strategic marketing is defined as the process of aligning strengths of an organisation with the groups of customers it can serve. (Kotler 31) This means that the marketing strategy will align an organisation with a group of customers where it can meet their needs better than its competitors. Strategic marketing affects the whole direction and future of an organisation.
You need a complete understanding of the macro and micro environments and markets served to inform your marketing process. In the same way that your organisation is developing strategic marketing plans to grow the business, your competitors will be doing the same thing, constantly searching out new ways to capture and retain customers. Therefore the basics of strategic marketing involve three interdependent parts so messages are directed appropriately: market segmentation and positioning, developing a relationship with the customers, and competitive strategy. (Kotler 31) Figure 1 defines these parts of strategic marketing.
Figure 1: Strategic Marketing Three Parts of Strategic MarketingDefinition Segmentation and positioningDividing the total market into groups of similar customers, then targeting specific groups depending on their attractiveness; giving the product favourable associations in the minds of the target customers Relationship marketing Building and maintaining profitable customer relationships by delivering better value and satisfaction Competitive strategyBuilding an advantage over the competition; delivering customer value that competitors will find difficult to copy
By analysing these three parts of strategic marketing, the organisation can also gain a deeper understanding of itself. Knowing who its customers are, their perceptions and purchasing habits, and also understanding how the organisation’s products, services and marketing differ from its competitors enables organisations to plan the future activities to engage with its marketplace. One way to illustrate the organisation’s areas for potential market growth is to use Ansoff’s product/market expansion grid as shown in Figure 1. Kotler 66) Figure 2: Ansoff’s product/market expansion grid Existing productsNew Products Existing MarketsMarket PenetrationProduct development New marketsMarket DevelopmentDiversification In this table, Ansoff provides a way of deciding how to achieve growth. It shows four areas for achieving growth: market development, new markets, new products and diversification. Market penetration is increasing sales of existing products in existing markets. (Kotler 65)
Market development is entering new markets with existing products. (Kotler 66) Marketing strategy provides the guiding philosophy for the company (how to serve the needs of customer groups), as well as inputs to overall company strategy by identifying market opportunities and assessing the firm’s potential to take advantage of them. (Kotler 67) Strategic marketing has a key role to play in developing market share and growth when you focus on market penetration and market development.
Because the organisation already offers existing services and/or products in a competitive marketplace, one may consider these areas the “low hanging fruit” of the business as moving into new markets or developing new products incurs more risk. Therefore the minimise risk, it is the very important role of the marketing professional to concentrate efforts on these routes to grow the business. Examples of marketing strategy for these areas can be seen in Figure 3. Figure 3: Examples of Marketing Strategy for Market Penetration and Market Development
Existing products Existing MarketsMarket Penetration: Mercedes-Benz new C-class (medium-sized family saloon) and E-class (executive saloon) luxury cars helped them increase sales by 23% New marketsMarket Development: Mercedes-Benz entered the small car market with its A-class small family saloon and Smart Car Market Development and Penetration in a Virtual Marketplace The marketing strategies outlined in Figure 2 represent core activities that your organisations are probably already implementing and measuring.
Yet as also described above, your customers are all different and with technological advances that where unheard of just 20 years ago, the needs and attitudes of your customers are also changing. The Digital Age refers to the macro-environmental forces of recent new technological advances that have shifted the business world and change the way we live our lives on a day to day basis. These forces that are shaping the digital era or internet age are digitalisation and connectivity, the explosion of the Internet, new forms of intermediaries, and customisation and customerisation as outlined in Figure 3. (Kotler 128)
Figure 3: Forces shaping the Internet age Definition (Kotler 129-131)ExampleImplications Digitalisation and connectivityDigitalisation is where appliances operate on digital information which is a stream of zeros and ones, or bits; for these bits to flow from one appliance to another requires connectivityInternetAllows users all around the world to access a vast amount of information Internet explosionWith the creation of the World Wide Web and web browsers, the Internet was transformed from a communication tool into a revolutionary technologyThe number of web surfers worldwide is expected to reach 1. billion in 2007Leads to innovation because it allows consumers and companies to access and share large amounts of information with just a few mouse clicks New forms of IntermediariesInternet companies selling products and services via the Internet; products and services tradionally sold by store based retailersComputer manufacturersEstablished store-based retailers going out of business Customisation and CustomerisationCustomisation is where a company customises the market offering; customerisation is where the company leaves it to individual customers to design the offeringFor customisation, Levi would take the customers measurements and then customise their jeans at the factory; whereas customerisation means a customer would take their own measurements and add specific featuresCompanies become facilitators with customers moving from consumers to prosumers As seen in Figure 3, forces shaping the digital age can have both positive and negative implications on the marketplace.
Therefore, in order for the business to keep up with the changing customer in the Digital Age, marketing strategy must integrate its activities to fit into the digital environment. The Digital Age presents both new opportunities and challenges for the organisation, but strategic marketing planning means that activities can target customers just as, if not even more, effectively as traditional non-digital marketing methodologies. Some digital marketing methodologies are outlined in Figure 4. Figure 4: Examples of Digital Marketing Methods (Kotler 134-153) Digital Marketing MethodDefinition e-commerceBuying and selling supported by electronic means WebsitesA site on the Web which carries information, answers customer questions, builds customer relationships and generates excitement about the company.
The site can also engage consumers and move them closer to a purchase Online advertisingAdvertising that appears whilst consumers are surfing the Web, including banner ads and skyscrapers Viral MarketingWord-of-mouth marketing on the Internet; email messages that are so appealing that customers will forward them on to friends Web CommunitiesWebsites where members gather to exchange views on shared interests WebcastingAutomatic downloading of customised information of interest to recipients computer; ideal for delivering Internet advertising As seen in Figure 4, digital marketing methodologies represent the online or computerised versions of traditional marketing communications tactics. The benefits of these methods are that marketers are able to tailor their offers effectively to targeted customers at relatively low cost.
They are a powerful tool for building customer relationships, plus they increase a sellers’ speed and efficiency as well as offering easy access to world markets. Figure 5 shows examples of where these methods can fall into place within Ansoff’s growth model. The Marketing Mix for a Digital Strategy Integrating digital methodologies involves re-evaluating your organisation’s marketing mix in the context of the digital marketplace. Marketing mix is defined as the set of controllable tactical marketing tools ??? product, price, place and promotion ??? that the firm blends to produce the response it wants in the target market. (Kotler 34) The marketing professionals within organisations place different emphasis on each of these tools depending on the type of organisation and the target market.
Integrating the e-marketing Communications Mix into Marketing Mix Figure 6 shows examples of the e-marketing communications mix. Table 7 illustrates how the e-marketing communications mix can be integrated to complement and support offline marketing tactics. Table 7: Integrating the e-marketing Communications Mix into Marketing Mix Offline marketinge-marketing Product PriceDiscounts for redeeming couponsDiscounts for ordering via company website PlaceRetail outlets, call centreCompany website PromotionDirect mail, press ads, postersEmail, banner ads Physical Evidence Process Integration of e-comms with offline activity, branding, customer experience, communications to have web address.